American Railcar will invest in leasing plan

Posted on December 14, 2010

American Railcar Industries Inc. (ARI) said it plans to invest in railcar leasing as it seeks to expand and diversify its business in response to customer demands and market conditions.

"ARI is very excited to offer railcar leasing and provide another option for customers to utilize our quality railcars," said President/CEO James Cowan. "We remain committed to meeting the needs of our customers. The economy and railcar market have been challenging over the last couple of years and ARI is responding to those challenges with an expanded market strategy."

The company, which currently sells, repairs, refurbishes and provides fleet management services for railcars, believes railcar leasing will provide customers with a broader offering of services.

ARI is currently in negotiations with American Railcar Leasing LLC (ARL), an affiliate, to enter into an agreement pursuant to which ARL would identify potential leasing customers for ARI in exchange for fees payable by ARI to ARL.

ARI also anticipates that the leasing business will provide a more consistent stream of cash flows and revenue, which management expects would diversify the company and improve performance during the down cycles of the railcar market. ARI currently plans to fund leasing operations through existing cash.

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